Stocks rallied and the Nasdaq closed at a record level after the market shrugged off the mid-day drama with President Donald Trump and Fed Chair Jerome Powell.<\/p>\n
The Dow led the market, up 232 points, or 0.5%, while the S&P 500 was 0.3% higher. The Nasdaq was the laggard, up 0.3%. Its modest gains still led it to an all-time high of 20,730.49. This is the index’s third consecutive record close, the longest streak of wins since Dec. 4.<\/p>\n
Things weren\u2019t as rosy earlier in the session. All three major indexes took a sharp dive lower a little before noon. Bonds also sold off and the dollar tumbled about a percent after media reports said the president was likely to fire the Fed chair soon. Trump later said it was ‘highly unlikely,’ although he wouldn\u2019t rule it out.<\/p>\n
The market’s pullback\u2013and reversal following Trump’s statements\u2013reflected how deeply reliant the market is on Trump\u2019s comments.<\/p>\n
The reaction in the Treasury market was more troubling. A sharp rise in the 30-year above 5% suggests that investors, scared about the Fed losing its political independence, quickly rushed to demand more return from U.S. assets. Yields typically move more slowly.<\/p>\n
“It is another incredibly whippy session on dozens of Fed related headlines,” Mizuho\u2019s Daniel O\u2019Regan wrote in a note to clients.<\/p>\n
Trump has criticized Powell for keeping interest rates steady, and has also disparaged the $2.5 billion renovation of the Fed’s headquarters.<\/p>\n
Powell’s term expires in May 2026.<\/p>\n
“An easier solution (and one that wouldn\u2019t involve the courts) would be to announce the President\u2019s choice to replace Powell and afford the nominee the opportunity to publicly outline the initial gameplan when taking the helm of the FOMC next year,” wrote BMO Capital Market’s rate strategist Ian Lyngen.<\/p>\n
Powell\u2019s removal could also lead to more volatility in the markets. The decision “could come with costs and not necessarily provide the desired benefits,” wrote Matthew Luzzetti, Ph.D. Chief US Economist at Deutsche Bank.<\/p>\n","protected":false},"excerpt":{"rendered":"Stocks rallied and the Nasdaq closed at a record level after the market shrugged off the mid-day drama…\n","protected":false},"author":2,"featured_media":150,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,63,99,171],"class_list":{"0":"post-149","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-markets"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=149"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/149\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/150"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}